itlawwikiaorg-20200214-history
Suspicious Activity Report
Overview A Suspicious Activity Report (or SAR) is a report regarding suspicious or potentially suspicious activity, filed with the Financial Crimes Enforcement Network (FinCEN), an agency of the U.S. Department of the Treasury. The purpose of the Suspicious Activity Report is to report known or suspected violations of law or suspicious activity observed by financial institutions subject to the regulations of the Bank Secrecy Act of 1970 (BSA). In many instances, SARs have been instrumental in enabling law enforcement to initiate or supplement major money laundering or terrorist financing investigations and other criminal cases. Information provided in SAR forms also presents FinCEN with a method of identifying emerging trends and patterns associated with financial crimes. The information about those trends and patterns is vital to law enforcement agencies and provides valuable feedback to financial institutions. Who reports suspicious activity The report can start with anyone at a bank, from a teller to a back office clerk to a manager. They are generally trained to be alert for suspicious activity, such as people trying to wire money out of the country without identification, or someone with no job who starts depositing large amounts of cash into an account. Employees are trained to communicate their suspicion up their chain of command where further decisions are made about whether to file a report or not. Many different financial industries are now required to file SARs. Each SAR form was specifically designed to accommodate respective institution types such as depository institutions, money services businesses (MSBs) or the securities and futures industry. When is an SAR filed? FinCEN requires a SAR report to be filed by a financial institution when the financial institution suspects: insider abuse by an employee; violations of law aggregating over $5,000 or more where a subject can be identified; violations of law aggregating over $25,000 or more regardless of a potential subject; transactions aggregating $5,000 or more that involve potential money laundering or violations of the Bank Secrecy Act; computer intrusion; or when a financial institution knows that a customer is operating as an unlicensed money services business. Structure of SAR reports SAR reports include detailed information about transactions that are or appear to be suspicious. While many institutions file thousands of SARs a year, very few people will have a SAR filed with their name included. The goal of SAR filings is to help the Federal government identify individuals, groups and organizations involved in fraud, terrorist financing, money laundering, and other crimes. SAR confidentiality Unauthorized disclosure of a SAR filing is a federal criminal offense.U.S. Treasury, Unauthorized Disclosure of Suspicious Activity Reports. In other words, any bank employee who has a suspicion is trained to only discuss the suspicion with their supervisors, and not anyone else, including the customer who is under suspicion and coworkers. The fact that an SAR has been filed is also supposed to be a secret. An individual or organization is precluded from discovering the existence of a SAR filed that includes their name. Financial institutions undertake an investigation process prior to filing a SAR to assure that the information reported is appropriate, complete, and accurate. This process will often include review by financial investigators, management and/or attorneys prior to filing. SAR filing options An institution can file SARs through the mail (paper forms are Adobe Acrobat screen fillable), electronically through FinCEN's BSA E-file program, or through a magnetic media format on either a cartridge or 3.5" floppy disk. Penalties for non-compliance Financial institutions and their employees face civil and criminal penalties for failing to properly file Suspicious Activity Reports, including large fines, regulatory restrictions, loss of banking charter, and/or imprisonment. Parts of a SAR A SAR contains five different sections with each section containing information about the filing institution or the activity in question. Part I Contains the filing institutions name, address, tax ID number, location of the suspicious activity and any account numbers involved with the suspicious activity. Part II Contains any name, address, social security number or tax IDs, birthdate, driver's license numbers, passport numbers, occupation and phone numbers of all parties involved with the suspicious activity. Part III Contains the date range of the suspicious activity, total dollar amount and list any law enforcement agency that has been contacted while investigating the suspicious activity. Part IV Usually contains the contact information for the financial institution's Compliance Officer or equivalent. Part V A written description of the nature of the suspicious activity. References External links * FinCEN main site. * FinCEN's website for MSBs. Category:Security Category:Financial Category:Criminal